Lillian Vernon Wants To Be The Life Of The Party
November, 16 2004
Direct Marketing News, 10.15.04
Mickey Alam Khan
It's party time for Lillian Vernon Corp. The general merchandise cataloger and online retailer this month debuted Celebrations by Lillian Vernon, a home party brand in the image of Tupperware, Longaberger, Avon, Mary Kay and Pampered Chef.
"This direct selling business is going to bring Lillian Vernon products into people's homes for sale in a party format," said Jonathan Shapiro, president of Lillian Vernon, Rye, NY.
It is the first major diversification since Zelnick Media's Direct Holdings Worldwide arm bought Lillian Vernon in July 2003 for $60.4 million. The new business coincides with tweaks to Lillian Vernon's catalogs and an increased focus on e-commerce.
Celebrations, as the home party venture is generally referred to, is a nod to the increased competition in the general merchandise category. Celebrations parties started the week of Oct. 4 in Douglaston, NY; Peru, IL; and Pittsburgh. An incentive drive to recruit founder consultants has begun. The main route to register is at www.celebrationsbylillianvernon.com, where consultants place orders.
Celebrations is positioned as a career opportunity for women to work from their homes. Consultants can sell directly or sponsor someone else. Base commission is 25 percent of personal sales. A productivity bonus is promised to superstars. And royalties are earned on sponsored consultants' or promoted group sales.
Celebrations will collect and submit sales tax for consultants. Party hosts can accept credit cards, and Celebrations will pay the fees. Consultants will be paid twice a month through a direct deposit program. Celebrations, and not the consultant, will ship each item directly to the customer.
Consultants must host parties to sell the Lillian Vernon collection for seasonal events, everyday moments and commemorations. The merchandise, typically priced from $14.98 to $34.98, caters to seasons, birthdays, anniversaries, weddings and gifting occasions.
A consultant pays $199 for the starter kit, which includes display products worth $250 as well as special Celebrations catalogs, order forms, business supplies and training materials valued at more than $100. Consultants have unlimited use of the Celebrations Internet Sales Management System, a suite of software for order entry and business management.
The kit will vary during the year to support Lillian Vernon's four seasonal Celebrations catalogs. These catalogs are selling books distributed at the parties and are not mailed.
"On the people side, we want to make sure we have a team that could rebuild this brand," Shapiro said. "On the platform side, there are a number of different systems that, for Lillian Vernon, were state of the art 10 to 15 years ago. We needed to upgrade these capabilities to give us a solid foundation on which to build. The most important of the three P's was the product line."
The company hired new merchants, including chief merchandiser Alyce Goodman. Founder Lillian Vernon contributes merchandising suggestions. The company's product focus remains on personalization, celebration and organization.
Lillian Vernon's roots are in mail order, starting with a personalized handbag and matching belt on her kitchen table in 1951. Today, its five catalog titles -- Lillian Vernon, Lillian's Kids, Favorites as well as personalization and sales books -- display 500 to 750 styles depending on the time of year.
"And guess what: 53 years later, our best-selling product is a personalized handbag," said David Hochberg, vice president of public affairs at Lillian Vernon and the founder's son. The mini-totes are a $1 million business.
Under new management, the catalog went from digest size to standard format. The change enables more flexibility in modifying and targeting offers. A new logo and icon were introduced. Perhaps a major change was in the cover.
"We didn't often have in the past a person on the cover," Shapiro said. "We typically featured a product, and what we're trying to do here is introduce a lifestyle element to our book. And so that's why, in all of our covers going forward, we'll have people on the cover."
Expect a slightly younger demographic on the cover. The typical Lillian Vernon customer is in her mid-40s, married with children and owns her home. She has a college degree and, Shapiro claims, is slightly more affluent than the average mail-order buyer.
Catalogs account for almost 55 percent of revenue. The rest comes from e-commerce, 10 outlet stores in New York, Virginia, South Carolina, Tennessee, Vermont and Delaware, and business-to-business sales. The company wants to change that.
"The Web site is running at 40 percent of total business," Shapiro said. "We expect it to increase in our peak season. We have a goal in the next 12 months to get the Web site to 50 percent of our total business."
The company's total database surpasses 25 million. The 24-month file contains 4 million to 5 million names. These names, plus prospects, get 100 million catalogs annually from Lillian Vernon. They also generate an estimated 800 million to 1 billion page views yearly. The full Lillian Vernon product complement of 6,000 SKUs is listed online.
The consumer site at www.lillianvernon.com was given a new look and feel earlier this year. Fry Inc.'s Chicago office was the developer. The new site is geared to improve customer service, merchandising capabilities and navigation. Another facelift is planned for January.
Lillian Vernon's typical tactics for customer acquisition and retention include online advertising, search engine marketing, magazine ads, freestanding inserts and the MSN portal program. This is in addition to e-mail, mail and catalogs.
Changes at the company are best summed up by its new tagline: "We are a lot more than your mother's Lillian Vernon."